Monetary Theory and Policy (Second Edition)

Author: Carl E. Walsh
Publisher:
Publication Date: 2004-11-06
Features: Professor Carl E. Walsh's book "Monetary Theory and Policy" provides an in-depth exploration of the key design elements of monetary economics and the models economists use to examine the interplay between real and monetary factors. The book extensively discusses general equilibrium models of money, models of the short-term real effects of monetary policy, and the game-theoretic analysis of monetary policy. The topics covered include implicit money utility functions, cash reserve models, finance and public finance, the credit channel of money, forward-looking consistency models, monetary policy operating procedures, interest rates and monetary policy, and more. Since the book's publication (edition), it has been highly praised by experts and adopted as a textbook for monetary economics and macroeconomics at many universities in the United States and Europe.
The second edition of the book not only updates and expands the content of the previous edition but also adds discussions on cutting-edge topics in monetary economics, making it both a classic in the field and a reflection of its latest developments. The book features rigorous theoretical discussions, extensive empirical analyses, precise model derivations, and lively policy critiques, truly earning its reputation as a monumental work in monetary economics!
The new content added in the second edition includes empirical evidence on the interest rate elasticity of money demand, the fiscal theory of the price level, new Keynesianism and its policy analysis, forward-looking models and optimal policy, stability and the Taylor principle, and new Keynesian models in open economies. The second edition also expands its discussion on the role of multiple equilibria in the cash reserve model and provides a more detailed analysis of the Ramsey method for optimal monetary taxation.